View more on these topics

Industry split over success of Help to Save

The pensions industry is split over whether, three years on, the government’s Help to Save initiative has been a success.

The accounts were announced by former prime minister David Cameron ahead of the 2016 Budget.

Figures released today show that 64,350 people have deposited just over £13 million in Help to Save accounts, receiving a combined bonus of around £6.5 million.

However, the government had said there were up to 3.5 million people who could take advantage of the reform.

Average deposits have been near the limit. At £44 a month they are only £6 a month below the government’s ceiling.

AJ Bell senior analyst Tom Selby says, regardless, “it is hard to escape the conclusion the programme has been something of a damp squib” given how hyped it was.

He adds: “While it is clearly positive over 60,000 people have benefited from a 50 per cent top-up on money saved through the scheme, that is a small fraction of the 3.5 million who could have claimed.

“Given the scheme is aimed directly at those on the lowest incomes, it is perhaps little surprise take-up has been so low. If you are on benefits and struggling to make ends meet, even a significant savings carrot will make little difference to your spending decisions.”

Other pensions industry figures encouraged greater awareness of the scheme through wider financial education.

Quilter corporate affairs director Jane Goodland says: “So much more can be done to give people the confidence and basic financial know-how. Government has said this scheme could help hundreds of thousands, but that is only going to happen if the scheme is combined with a sustained effort to improve financial awareness and education. Saving is not part of our DNA right now, and is under threat from the a consumer culture that makes it easy to spend at a tap, or take a loan in minutes.”

Aegon head of pensions Kate Smith said that the Help to Save uptake could spur people to look more seriously at the rest of their finances and savings.

She says: “The scheme will help people develop healthier saving habits and in the long term will hopefully inspire them to consider other savings such as workplace pensions and Isas. In the current low interest rate environment, cash saving won’t always feel rewarding, but with the government bonus, this scheme is very attractive.

“[The figures] indicate that each person has on average saved around £144 per person. When the government bonus is added this will be around £216. Although this is a good start, we would encourage people to save more to maximise the government bonus as the scheme has a very limited shelf life, particularly as savings won’t be tied up.”

Recommended

11

Garry Heath: Why adviser trade bodies still matter

Nic Cicutti’s recent article in Money Marketing saw him launch attacks on Libertatem and Pimfa.  But is he right – or is it more personal than that? Generally, I avoid reading Nic Cicutti’s contributions. I have low blood pressure and I like to keep it that way. But last week, he embarked on a personal […]

Business-Handshake-Finance-Deal-700.jpg

Quilter acquires 200-adviser firm

Quilter has acquired financial planning business Charles Derby in a deal that will add over 200 restricted advisers to its national advice arm. Charles Derby was already a member of Quilter’s network Intrinsic but has now been fully acquired. The acquisition will see over 200 restricted financial planners transition to Quilter’s national advice business during […]

6

Malcolm McLean: Simpler pension tax relief is only fair

Pension tax allowances have created a complicated system that is not working in the interests of consumers Being able to get tax relief on contributions to a pension scheme is probably something that we tend to take for granted and don’t value enough. The relief provides an incentive to join a pension scheme in preference […]

Technology-Tech-Currency-Money-700x450.jpg
1

Standard Life cuts Elevate platform fees

Standard Life will reduce fees for its Elevate platform clients. While the new pricing will be available to new clients from April 1, the existing clients will have to wait before the end of the year to benefit from the pricing changes. The step comes as the providers are facing pressures to decrease their charges. […]

Colin Simmons

Blending solutions to provide more income stability

Colin Simmons, Prudential Business Development Manager, writes about greater income stability through blending solutions with a Prudential Trustee Investment Plan (TIP). With the introduction of Pensions Freedom and choice, more advisers have been focusing on, and recommending income drawdown products for retirees. However,  the flexibility provided by no limits for drawdown income creates a problem […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com